Small firms found to contribute majority of new jobs in EU

Some 85 percent of the new jobs created between 2002 and last year came from small and medium-sized enterprises (SMEs), said the European Commission in a report released Monday. The report indicated that employment in SMEs grew by 1 percent annually, which is substantially higher than large companies' growth rate of 0.5 percent. The only exception was in the trade sector where SMEs employment increased by 0.7 percent annually, compared to 2.2 percent in large enterprises. This is due to the strong increase of large enterprises, in particular in sales, maintenance and repair of motor vehicles. Within the SME size-class, micro firms (less than 10 employees) are responsible for the highest proportion of total net employment growth (58 percent). Also, new firms (younger than five years) are responsible for an overwhelming majority of the new jobs. New enterprises operating in business services create more than a quarter of new jobs (27 percent), while new firms in transport and communication contribute least (6 percent). "In this critical time for European economy, we see small enterprises delivering and confirming their role as main generators of new jobs," said European Commission Vice-President Antonio Tajani, who is responsible for Entrepreneurship and Industry. "Their significant share in job creation highlights the greater than ever economic relevance of SMEs and the need to support them at all levels. The small and new enterprises are clearly the key for restoring economic growth," he added.